United States District Court, Western District of Michigan; Docket No. 4-89-CV-91;
Opinion by Judge Richard A. Enslen; Unpublished
Official Federal Reporter Citation: Not Applicable; Link to Opinion
In this written Opinion by Judge Enslen, the United States District Court again visited the issue of whether a no-fault coordinated benefits policy is secondary to a health insurance plan that contains a similar coordination of benefits clause. In deciding this issue, the court stated it was first necessary to determine whether or not the health insurance plan contains a coordination of benefits clause or exclusion clause. The health insurer in this case argued that its clause was an exclusion and therefore not subject to the rule of Federal Kemper. In the previous federal decision of Transamerica Insurance Company v Peerless Industries (Item No. 1194), the District Court held that where a clause was truly an exclusion clause there was no liability on the part of the health insurer. The clause that was deemed to be a true exclusion in the Transamerica case stated: "[B]enefits are not payable under this plan for injuries received in an accident involving a car or other motor vehicle."
This was in contrast to the case at bar where the language used in the insurance policy was much more qualified, and stated: "All claims arising out of the Michigan no-fault insurance coverage are excluded for coverage under this plan. Motor vehicular claims arising under circumstances which Michigan no-fault insurance would not provide will be covered under the provisions of the plan." Judge Enslen ruled that this was not an exclusion clause but rather a coordination of benefits clause. In so holding, he stated: "The language does not clearly and unambiguously exclude coverage for claims arising from motor vehicle accidents. Rather liability is assumed for those vehicular claims where Michigan no-fault insurance would not provide coverage. Only when the claim is covered by Michigan no-fault insurance does the policy attempt to exclude coverage. Thus, it is specifically conditioned on the existence of other insurance and therefore is not an exclusion clause but in fact a coordination of benefits clause."
Having found that this was a coordination of benefits clause, Judge Enslen applied the decision in Federal Kemper and held that the health insurance was primary. The fact that the defendant's health plan was a "self- insured plan governed by the federal Employment Retirement Income Security Act (ERISA)" did not change the result. Self-insured ERISA health plans do not preempt Michigan no-fault law as was held by the Sixth Circuit in Northern Group Services v Auto Owners (Item No. 1090). Therefore, the health insurance plan was primary and must reimburse the coordinated no-fault insurer.